ISLAMABAD: The Oil Marketing Association of Pakistan (OMAP) has demanded the federal government to release Rs90 billion in foreign exchange adjustments and tax refunds to the oil industry.
The association has appealed to Finance Minister Muhammad Aurangzeb to ensure the availability of foreign exchange for oil imports and to reduce the turnover tax in the upcoming budget.
OMAP Chairman Tariq Wazir Ali lamented the industry’s liquidity problems due to massive foreign exchange adjustment losses, sales tax refunds, and the smuggling of Iranian petroleum products. He said oil marketing companies (OMCs) are burdened with Rs. 26 billion in foreign exchange adjustment losses.
Additionally, Rs. 65 billion in sales tax refunds are stuck and making it increasingly difficult for OMCs to operate efficiently. The rampant smuggling of Iranian petroleum products into Pakistan is also undermining legitimate operations and inflicting Rs. 1 billion in losses per day on the economy.
The liquidity crisis is further intensified as financial institutions become hesitant to extend credit lines to OMCs. This situation has increased the cost of doing business. Meanwhile, the turnover tax adds financial burden, hurting profits drastically, Wazir Ali added.
